Retirement Planning – Highwood
For the people in "Generation X" - defined as folks born between the mid-1960s and the early 1980s - retirement planning seems like something your mother and father or other "old people" would do. But you know what? With lots of "baby boomers" either already in the midst of retirement or observing it on the horizon, "Generation X" is the next generation of individuals to reach retirement. Sure, it is a ways off, but those in their 30s and 40s must begin centering their investment planning on retirement and making sure they have the kind of retirement they are working so hard to enjoy. Below are great tips on preparing for retirement:
Retirement life in the future will be different than the retirement in the present day. It will be better in some ways, and worse in some ways. But, the retirement planning for today's workforce must be far different than it was in yesteryear.
On the bright side, people are living longer than ever. As of a few years ago, the average life span of an American was 77.9 years, exactly 2.5 years over the average life span in 1990 and more than 4 years more than the average life span in 1980. Therefore investment planning for retirement has to account for a longer period of time right now than a generation or two in the past.
Social Security and Retiring - Highwood
On the downside, Social Security is going to be a far less trustworthy source of income than it is now. And also the odds are slim-and getting slimmer every year-that retirees 20 and 30 years from right now will be able to rely on a work pension and enjoy lifetime benefits from their former workplace. Increasingly more, retirees will need to rely on their savings to cover the costs of living and health insurance.
With folks living longer and needing more money to do so, retirement planning is a vital activity even for those people who are halfway to the regular retirement age of 65. It may be an intimidating task to plan for a couple of decades into the future, especially with bills, housing costs and mortgages to pay today, but procrastinating won't make it any less difficult.
Placing even just a little bit of money now into a savings account which functions as a retirement savings plan can pay off in the future. The interest you get on money in a savings account will allow your initial investments to grow to something sustainable. A savings account will provide a place where you can pile up capital earning a little interest rate until there's enough to invest in a reliable security which will yield you more like a municipal bond.
Another good strategy that could certainly and steadily build a nest egg is to put money into long-term bonds. Upon maturation of the bond, you will get back your initial investment along with all the interest which collected over the life of the bond. This is a considerable amount of money for a 20- or 30-year bond-money that could provide a good foundation for retirement. And a municipal or government bond is as safe an investment as you can ever make.
401K and IRA - Highwood
However, the best approach when it comes to retirement planning is to put cash in a 401K plan at work or in an IRA opened with an investment house. For those for whom a 401K is not a retirement planning option, an IRA is the next best thing. Money put into this account is tax deferred and may be tax-deductible, depending on how much is invested annually.
For more details, please do not hesitate to contact GC Financial Advisors Ltd. at any time and we'll be happy to help you! We provide 401K and IRA rollover and review services for folks in the Highwood area.
